July 25, 2014

Obamacare Subsides on the Line

CEPR's Dean Baker and Media Matters' Jeremy Holden discuss two federal courts
decisions which could disqualify lower and middle income earners for subsidies
and the forces working to dismantle Obamacare

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audio

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biography

Jeremy Holden is the director of research at Media Matters and host of Media Matters Radio on SiriusXM. He has more than 10 years experience analyzing public policy, reporting on business and government, and researching the effects of media on public behavior. He holds a Master of Arts in media studies from George Washington University.

Dean Baker is senior economist at The Center for Economic and Policy Research (CEPR). He is the author of several books including, The United States Since 1980; Social Security: The Phony Crisis (with Mark Weisbrot); and The Benefits of Full Employment (with Jared Bernstein). He appears frequently on TV and radio programs, including CNN, CBS News, PBS NewsHour, and National Public Radio.

transcript

Obamacare subsidies for low- and middle-income earners are hanging in the balance. On Tuesday, in a dramatic split decision, two federal appeals panels disagreed on the legality of Obamacare subsidies, which provide billions of dollars to help 4.7 million people buy health care insurance on HealthCare.gov. This federal government exchange system operates in 36 states. And now, with these two decisions, it's looking like this case could head all the way up to the Supreme Court for a final decision.

Now joining us to get into the significance of these two decisions are our guests. Jeremy Holden is the director of research at Media Matters and host of Media Matters Radio on Sirius XM.

And also joining us, from Washington, D.C., is Dean Baker. He is the codirector of the Center for Economic and Policy Research.

DESVARIEUX: So, Dean, I'm going to start off with you. What's so significant about these two cases?

BAKER: Well, the immediate issue is whether the federal government can provide subsidies to people in the exchanges, in the federal exchanges. An important point to make here is that there's a distinction between exchanges at the state level--14 states are offering their own exchanges, plus the District of Columbia--and then the 36 states which didn't set up their own exchanges and are using the federal exchange. And through a quirk in the law, which is basically a mistake, the wording says that they could provide subsidies to people in these state exchanges. Now, there literally is no record of anyone advocating restricting the subsidies to the state exchanges, but the court in D.C. is saying, well, that's what the law says, so that's what it means, and that means the subsidies in the federal exchanges aren't under the law. So it's important to understand this doesn't get rid of subsidies in the exchanges. It means that if you have Republicans--I'm not being partisan here; that's been the reality--who want to deny subsidies to people in their states, they would be able to do so if that were upheld by the Supreme Court. It's to my view a perverse opinion. I don't know if that threatens Obamacare or not, but it certainly would lead to perverse outcomes.

DESVARIEUX: So, Jeremy, I want to bring you into the conversation. Who's actually behind challenging the Obamacare law? I know of one group, the Competitive Enterprise Institute. What's their agenda, and who's backing them financially?

HOLDEN: Well, I haven't had a chance to go through the 990s and know specifically what groups are backing Competitive Enterprise Institute, for example, but they've certainly been out front. And they're really part of an industry-backed cottage industry that has been pushing for years against any type of regulations. And they do this often with junk science. So what we've seen with the Competitive Enterprise Institute, for example, is they'll put out this annual report looking at the cost of regulations for businesses. But what they do is they only look at one side of the ledger and make no accounting for any benefits to regulations. They're really kind of creating this dishonest understanding of what a regulatory framework might look like. And what we're starting to see now with these groups--and, again, Competitive Enterprise certainly not alone on this; Cato is a key player in this, American Enterprise Institute. A lot of these organizations are now using their platforms to try and mainstream really fringe legal theories. I think a lot of legal experts that we talk to running into this--one professor down at Washington and Lee in particular has said that this type of legal argument has really no chance to advance in a serious legal system. But yet we see these legal theories becoming mainstream.

DESVARIEUX: Why wouldn't it have a chance to advance?

HOLDEN: Well, the idea being that it involves a very hyper-technical, hyper-literal reading of the legislation, and something that other judges have looked at and other courts and said, this is kind of silly to suggest that the legislation should be read this--so hyper-technically. And so it's been seen by legal experts and scholars as a very fringe theory. And we'll see now if the larger D.C. circuit agrees with this small ruling.

DESVARIEUX: Yeah, but this fringe, it's interesting. Now it's sort of in the mainstream. It's all over the press.

But, Dean, I want to bring you back into the conversation too, to talk about some of the arguments that people are saying in terms of this being actually a good thing, because it turns the conversation back to single-payer, because a market-based solution, it's kind of not working to fix our health care problems, because it's going to face its day in court, and who knows? A panel of judges can decide that it's not constitutional or we should be striking down some of these subsidies. So what's your take on that?

BAKER: Well, I'm afraid I don't see how this gets us anywhere near single-payer. I mean, it can throw a big monkey wrench in the Obamacare system. I don't see that leading to anything in single-payer. Frankly, all these people, I guarantee that they can come up with 1,000 arguments at least as credible against single-payer, if not more so. So that's really not going to be on the agenda here. The real question is whether people are going to be able to afford health care.

And, my guess is that this will not be upheld by the Supreme Court. But in the event it did, I actually--it's bad news for the people that won't get subsidies, but my guess is it will probably pay politically for the Democrats, because you'd be in this absurd situation where your Republican governor is keeping you from getting subsidies for health care. This isn't just poor people. They're always happy to beat up on poor people, but this is a lot of very middle-income people who are going to be denied subsidies that they're entitled to under the law.

DESVARIEUX: Alright. And do you see them media, Jeremy, actually shifting the conversation at all about this? Is there something that they're missing in their coverage of this story?

HOLDEN: Yeah, I think there is. And I think you talked about how these fringe legal theories increasingly become mainstream. And I think when we treat an organization like the Competitive Enterprise Institute, to stay on that example, we see them often called as a free market think tank. Well, that's all fine and good. They're also climate deniers, right? They're an anti-science think tank. And when we normalize them [in giving (?)] these kind of clinical kind of clean names, it gives them some added credibility, it gives them heft that allows them to help mainstream these theories.

DESVARIEUX: Alright. Dean Baker and Jeremy Holden, thank you both for joining us.

BAKER: Thanks for having me on.

HOLDEN: Thank you.

DESVARIEUX: And thank you for joining us on The Real News Network.

End

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